The next move in the Yahoo-Microsoft-Icahn saga is Carl Icahn’s: He has to get Microsoft back to the negotiating table in the next few weeks. In the meantime, he’ll do everything he can to suggest that winning a proxy fight is a done deal, but if Microsoft isn’t playing ball, it won’t be.
The New York Post relays leaks that Steve Ballmer might be willing to take another look at Yahoo if it has new leadership (translation: If Carl Icahn gets the board fired). This is presumably another veiled overture from Microsoft, similar to Chief Strategy Officer Craig Mundie’s remarks in Indonesia.
The problem with this scenario, as dissident Yahoo shareholder Eric Jackson points out, is that if a new Yahoo board is elected with the sole purpose of selling to Microsoft, Yahoo will enter the subsequent negotiations with little or no leverage. Specifically, the negotiations will be led by a board that has only one goal: to dump the company. Steve Ballmer didn’t amass an $11 billion fortune by not understanding what that means. (licence to steal).
If the best Carl Icahn can do for Yahoo shareholders is to say, “Fire the current board and I’ll get you a deal,” most Yahoo shareholders will tell him to get lost. (We would. We think Yahoo’s board blew the first round of Microsoft negotiations, but the company is headed in a more promising direction than it was a year ago, and firing the entire leadership would destroy any possibility of an organic recovery.)
Want us to implore Jerry Yang to get his butt up to Seattle to get a $33-$34 deal, Carl? Then make it clear that Steve Ballmer would be willing to buy the company for that. We’re not voting to fire Jerry, et al, just so you can dump the company for $29 or chop it up and sell the pieces.
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